I highly doubt it. There would be no point in lacing your product with poison unless you wanted to kill somebody. Maybe he pissed his dealer off.

EDIT: A lot of people lace it with PCP and call it a sherm stick/embalming fluid.
EDIT:EDIT: Some dealers sell the pcp-laced joints/ciggarettes and call them embalming fluid so people don't know they are being sold PCP. It's easy to see how a kid could hear about it and go ahead and dip a joint in REAL embalming fluid. Stupid kids these days.

Sherm is pcp. Formaldehyde is not pcp. Here is an excerpt from erowid on this very subject.

'PCP - 'Embalming Fluid' - 'Wet' - 'Fry'What Is It and What Do People Think It Is?

There appears to be a current trend of the use of substances known alternately by the slang names 'embalming fluid', 'fry', 'formaldehyde', 'wet', 'water', or 'amp'. These are sold in a variety of forms including cannabis joints or regular cigarettes dipped in liquid and cannabis leaf or tea leaves dipped in liquid. In all of these forms, the material is then smoked. Despite the variety of names, there is good reason to believe that these are all various preparations containing PCP.

In most instances PCP is not mentioned when the substance is sold or discussed. In fact, there are constantly re-circulating rumors that substances being sold by these names do not contain PCP, but are instead actually the fluid (formaldehyde) used for embalming as would be used in a mortuary. But there is evidence to support that this is primarily a case of confused slang terms. 'Embalming Fluid' is a common street slang term for PCP and has been for many years. PCP can come in liquid form, so the term 'fluid' is fitting. It is entirely possible (actually quite likely) that the confusion between PCP and embalming fluid (formaldehyde) has gone so far as to cause a new trend where PCP is actually mixed with formaldehye (or other 'embalming fluids') and used as a recreational psychoactive. But there is little evidence that the formaldehyde itself causes any pleasant or desirable effects.

Embalming fluid, as used in a mortuary, is traditionally made from formaldehyde. It does not contain PCP. Formaldehyde and PCP are completely different chemicals, which are not related. Formaldehyde is a known carcinogen linked to nasal and lung cancer, and with possible links to brain cancer and leukemia and should not be smoked.'

Sorry everyone i said the story wrong cause i didnt actually read it until now but someone else did that i know and he was talking about but he must have read it wrong or something because the student didn't die just got seriously injured and the student was the one that told people it was laced for formaldehyde so she probaly meant pcp but since its a slang she called it formaldehyde.